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Index Tracker Notes:

The S&P 500 closed Friday at a record 7,757.64, capping its best week since April with a 3.6% gain after a surprise 23,000-job contraction in July flipped September rate expectations from hike to hold. Stocks have drifted lower since, with Tuesday marking a second straight down session. The pullback is Iran-driven, with no deal on reopening the Strait of Hormuz lifting oil, and traders sitting tight ahead of Wednesday's CPI.

The market is coming off of another strong week last week, placing us at a new all time high to start the week. Sentiment shifted heavily late last week when the jobs report was much lower than expected, once again swinging the tide from rate hike in September, back to a hold now. July was a tough month for momentum stocks, especially some of the more speculative AI and Technology names. Since July 29th that tide has turned and sentiment is slowly shifting back from fear into slight greed. This week will likely be a catalyst in either direction for those same names. Earnings this week are highlighted by some high volume and high volatility names like $CBRS ( ▲ 15.07% ), $CRWV ( ▲ 0.7% ), $NBIS ( ▼ 3.18% ), & $SMCI ( ▼ 3.92% ). Watch for margins and backlogs for these types of names. One other company reports earnings this week that we want to dive into a little bit deeper today… Applied Materials.

Applied Materials is another AI infrastructure name that has road the coattails of massive demand during this bull market. Shares of the equipment supplier are up 108% YTD, 186% on the 1-Year, 306% on the 5-Year, and a staggering 316% since the tariff lows in April of 2025. Now this isn’t the only company that we have covered with incredible performance like this in years past, but what does Applied Materials do to make them stand out from the crowd? Think of it this way. We all know that Caterpillar isn’t a technology company, but they’ve had great success the last 30 months because of massive data center demand and productions. This is a similar way that a company like Applied Materials works. They don’t make any of the semiconductors or chips, companies like Taiwan Semiconductor do, however, since TSM is experiencing massive chip demand, that means they need more, and better equipment to make said chips; that’s where Applied Materials comes in. If I want to build a data center, I need a bulldozer, if I want to make better chips, I need advanced equipment.

Applied Materials makes the equipment for basically all of the stock market’s favorite semiconductor and memory companies. They provide equipment to names like $TSM ( ▲ 1.08% ), $SKHY ( ▲ 3.04% ), Samsung, $INTC ( ▲ 0.97% ), $MU ( ▲ 4.13% ). These names then are the ones supplying names like $NVDA ( ▼ 0.07% ), $AAPL ( ▼ 0.11% ), $AMD ( ▼ 1.63% ) with the chips and DRAM they need. So you can easily see how integral a company like Applied Materials is for the AI buildout just by looking at who’s writing the checks to buy their equipment. Just like our conversation a few weeks ago with Apple, memory has gotten quite expensive, but Applied Materials should be positioned well to be a huge benefactor of increased costs in 2026. $AMAT ( ▲ 5.55% ) posts earnings after market this Thursday and is anticipating a record quarter right around $9B in revenue, up over 23% year over year, which should be positioned well for an earnings beat if recent history repeats itself.

Last week did not disappoint, well income may have, but the chart didn’t. Last week just goes to prove you never know what to expect with an Elon company. SpaceX earnings came in ahead of expectations across the board. Revenue grew 92% year-over-year to $7.8B (with a surprise beat from Starlink) but the company still posted a net loss of $541 million - better than the approximate $1.9 billion Wall Street expected - with $18.4 billion of capex for the quarter keeping income in the red. Friday showed that the day one investors weren’t ready to turn a profit quite yet, and the new free float supply will force the hand of many funds and indexes to up their allocation on the $1.7T company. The Nasdaq should see SpaceX’s weighting more than double, if not even triple or four x during its next quarterly rebalance in September.

Corporate America spent three years hoarding money - this week it started spending it. Intel announced a $15 billion stock offering, likely its first public share sale since it listed in 1971, weeks after posting its fastest revenue growth of any quarter since 2011. Berkshire Hathaway's cash pile fell from a record $397.4 billion to $365.5 billion as Greg Abel bought back $4.5 billion in stock and turned net buyer of equities for the first time in over three years. Meta's cash is going out the door too, though not by choice on both counts: free cash flow collapsed 91% to $784 million under AI capex, while a New Mexico judge added a $567 million child-safety order to the $375 million already levied in March.. Ain’t nobody sitting on the sidelines anymore.

Palantir already answered the question everyone's asking about AI spending, posting revenue of $1.94 billion - up 93% - with U.S. commercial up 149% and a full-year guidance raise that sent the stock up roughly 30% in a single session and erased about $3 billion in short-seller paper gains. Four more names now report inside two days. CoreWeave and Super Micro both go Tuesday after the close: CoreWeave has to show its contracted backlog is converting to actual revenue while it spends $31 to $35 billion on data centers this year, and Supermicro has already pre-announced gross margins of 15 to 17 percent against guidance of 8.2 to 8.4 percent - on revenue at the low end of its range. Wednesday brings Nebius before the open and Cerebras after the close, the AI chipmaker that went public in May at $185, opened at $350, and has spent the months since giving it back.

The U.S. Strategic Petroleum Reserve fell below 300 million barrels last week, landing at 298.7 million - the lowest level since January 1983. It dropped 6.1 million barrels in a single week, according to Department of Energy figures published Monday. Authorized capacity is 714 million barrels, which puts the nation's emergency oil stockpile at about 42% full, with a statutory floor of 252.4 million barrels sitting not far below.

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